C. Earnings, income

What is wage tax or income tax to be paid on? The subject of income tax is income. It is the sum total of all incomes. The Austrian Income Tax Act (Einkommensteuergesetz) lists all types of income that are subject to income tax. This means that only income that falls under the types of income listed in the Income Tax Act is taxable. Gambling and lottery wins, for example, are not taxable; nor are childcare benefits or nursing care allowances.

The Austrian Income Tax Act specifies seven types of income:

1. Income from agriculture and forestry
2. Income from self-employment
3. Income from commercial operations
4. Income from employment
5. Income from capital assets
6. Income from rentals and leasing
7. Other income

= Total amount of income − Special expenses − Extraordinary burdens − Tax-exempt amounts = Income (= Tax assessment base)

Income types in categories 1 to 3 are known as "business income" or "income from profit". Income types in categories 4 to 7 are referred to as "surplus income" or "non-business income". Income is therefore the sum total of all earnings minus special expenses, extraordinary burdens and tax-exempt amounts.

At what level of income does tax liability commence? A certain basic income (subsistence minimum) remains tax-exempt for each person with unlimited tax liability. The tax-exempt basic income for employees in calendar year 2025 amounts to at least approx. €19,618 per year.

The tax-exempt basic income is to be distinguished from the marginal income threshold under social security insurance law. This is €551.10 a month for 2025.

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The declaration in detail:

1. Income from agriculture and forestry is earned, for example, by farmers or gardeners.
2. Income from self-employment is earned, for example, by doctors, lawyers, tax advisors, architects or journalists, and by shareholders/managing directors with an interest of 25% or higher in corporations (e.g. a limited company under Austrian law—GmbH). Rz 670
3. Income from commercial operation is profits from commercial enterprises (e.g. trading companies, craft companies, industrial companies). Legal entities (such as a limited company under Austrian law—GmbH) do not pay income tax but corporate income tax.
4. Income from employment is earned by employees and pensioners.
5. Income from capital assets includes private interest income from savings, securities, dividends and other distributions from shares in corporations or investment funds, and capital yields from the sale of private investments (e.g. equities, crypto currencies). As domestic income, this income is subject to capital gains tax of 25% or 27.5% and is thus usually subject to final taxation, i.e. no further income tax is levied. If such investment income or capital yields are received from abroad (e.g. interest from foreign savings, dividends or capital gains from stock sales without a domestic securities account), they are, as a rule, also taxed at 25% or 27.5% through income tax assessment.
6. Income from rentals and leasing is earned, e.g. when an apartment or a house is rented out.
7. Miscellaneous earnings include earnings from private sales of real estate (taxed at a flat rate of 30%, as a rule collected through real estate gains tax—Immobilienertragsteuer, ImmoEst), from speculative transactions (sales transactions of other private assets, such as gold and silver, within one year of acquisition), income from occasional performances (e.g. unique agency commissions), certain continuously accumulating pensions and functionary remunerations (payment for functionaries/officials of public bodies, provided that they are not employees).